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At US$81.79, Is It Time To Put Eastman Chemical Company (NYSE:EMN) On Your Watch List?
While Eastman Chemical Company (NYSE:EMN) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$91.75 and falling to the lows of US$78.73. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Eastman Chemical's current trading price of US$81.79 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Eastman Chemical’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Eastman Chemical
What's The Opportunity In Eastman Chemical?
Great news for investors – Eastman Chemical is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $124.66, but it is currently trading at US$81.79 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Eastman Chemical’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Eastman Chemical generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Eastman Chemical's earnings over the next few years are expected to increase by 45%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since EMN is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on EMN for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EMN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 3 warning signs for Eastman Chemical (1 is a bit unpleasant) you should be familiar with.
If you are no longer interested in Eastman Chemical, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Valuation is complex, but we're here to simplify it.
Discover if Eastman Chemical might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About NYSE:EMN
Eastman Chemical
Operates as a specialty materials company in the United States, China, and internationally.
Very undervalued established dividend payer.